The Obama administration’s corporate tax reform plan would end “dozens and dozens” of tax breaks, treasury secretary Timothy Geithner said on Tuesday as he defended the White House’s election-year call for higher taxes on the wealthy.
Companies, which pay wildly different levels of taxes, are clamoring for a cut in the corporate tax rate — which tops out at 35% — but disagree about how to strip out preferences that benefit selected industries.
Geithner spoke before the Senate Finance Committee a day after President Barack Obama unveiled a $3.8-trillion budget-and-tax proposal that called for aggressive government spending to boost the economy and higher taxes on the rich.
“We think they can handle it. We think they can afford it,” said Geithner.
The proposals have come under severe criticism from Republicans, who said it chooses winners and losers and moves away from tax reforms.
Geithner said the Obama plan would “wipe out a very substantial, dozens of special tax preferences,” in the corporate code, but keep a “very limited” number targeting incentives for “creating and building stuff in the US.”
The last time major rewrite of the US tax code came in 1986 under President Ronald Reagan.